CMHC Housing Market Outlook Spring 2022
The CMHC Housing Market Outlook provides forward-looking analysis into Canada’s housing markets. This helps anticipate emerging trends in Canada’s new home, resale and rental housing segments and their potential impacts on affordability and other housing challenges at the national and local level.
Key highlights from the 2022 release
- We expect the growth in prices, sales levels, and housing starts to moderate from recent highs but remain elevated in 2022. Robust GDP growth, higher employment and net migration will support demand.
- In 2023 and 2024, the growth in prices will moderate with sales and starts activity remaining above long-run averages. Home ownership affordability will decline with rising mortgage rates and with the growth in prices expected to outpace income growth.
- Rental affordability is also set to decline from increasing rental demand and low stocks of rental housing.
- The Prairie provinces, led by Alberta, will likely see relatively strong sales and starts levels and be stimulated by energy sector investments and higher energy and commodities prices. The growth in prices is predicted to remain below the national average reflecting more balanced supply conditions than in other regions.
Local area highlights
“As Calgary completes its economic recovery, housing sales and starts will continue at an elevated pace but is expected to be hampered by rising mortgage rates.” Michael Mak Senior Analyst, Market Insights
- Price growth in 2022 will be supported by continued demand from job growth and migration – but will slow as mortgage rates begin to price out homebuyers.
- Growth in economic activity will support housing demand, while limited listings in 2022 will support higher prices.
- Sales activity is expected to continue at a relatively strong rate, supported at first by low mortgage rates, but later by a strengthening economy.
- Housing construction activity will continue at elevated levels for the near future before facing slight downward pressure from tighter credit conditions.
Upside risks to the outlook
- Consumer boom resulting from improved market sentiment and unwinding of pandemic accumulated savings may lead to higher levels of economic activity and home prices.
- Higher-than-expected increase in energy and commodity prices are an upside risk to activity in the Prairies, while lower- than-expected prices are a downside risk.
Downside risks to the outlook
- Emergence of new COVID variants requiring lockdowns and harming consumer confidence.
- More persistent supply chain disruptions and tighter labour markets leading
to stronger than expected inflation pressures and interest rate increases. - Higher-than-expected energy and commodity prices are a downside risk to activity outside the Prairies, while lower than expected increases are an upside risk.
- Geo-political risks from the war in Ukraine, which could negatively impact confidence and world economic growth, particularly in Europe.
This is an excellent document to review in its entirety regarding all aspects of Canadian housing www.cmhc-schl.gc.ca/en/blog/2022/buying-home-will-continue-get-harderafford
Candace Perko,
Mortgage Broker
